Show 1 CASE IN I l FEDERAL COURT I Aged Banker Has Hopes of Escaping Term in United States Prison SEEKS TO PERFECT APPEAL ARGUMENT WILL BE HEARD BY BENCH OF THREE JUDGES Chicago May S Arguments of the government in opposition to the at attempt attempt attempt tempt of John R Walsh T under sen sentence sentence sentence tence to five years year eara imprisonment for alleged misapplication application of or the funds of or his bank the defunct Chicago National to obtain freedom of appeal to the United States circuit court of o appeals are arc contained In the brief flied filed today by b Assistant District Attorney Attorn C Fletcher FJ Dobyns in reply to the brief brier filed by counsel for or the defendant a month ago The Thc Walsh h banks the Chicago Nation National al a the Equitable Trust company com pan and the Home Savings closed their doors Dee Dec 18 IS 1905 1903 Walsh was indicted two years cars later on counts A year later the the case came to trial in the United States district court and a verdict find finding findIng finding ing the defendant guilty on four I counts was rendered Judge Anderson sentenced Walsh to five Fort Fart Leaven Leavenworth worth The appeal followed Oral arguments will be b heard by b Judges Grosscup Ba Baker Baker Baker ker and Seaman the last week in the I Im month m I Losses of It is said that the Walsh failure caused losses to himself stockholders and others aggregating Counsel for Walsh contended In their brief brier that the loans made by Walsh and his purchases of bonds of his own awn railroad with the banks money were legitimate transactions tran made for the benefit of the bank and without loss to the bank That counsel should seriously make such statement of fact to this court recites re ites the government brief can be explained only by the necessities of the case The brief contends that Mr Ir j I intention was not as president of the bank in good faith to make good loans and investments for the t bank but rath rather er pr to get the th funds of the tins bank to pro promote promote promote mote his personal enterprises and to conceal the real nature of his act Mr Ir Walsh says sars the brief was en engaged engaged engaged in the promotion of a large number of struggling enterprises which were in desperate need of funds Gen Generally Generally Generally speaking his mode of procedure was Method of Walsh He would learn of or some enterprise that was bankrupt or about to go into bankruptcy and ho would purchase It at a low price He would then organ organize organIze organize ize a corporation and sell the enterprise to this corporation taking in payment the capital stock of the new corpora corporation corporation corporation tion and a sufficient number of bonds which at their face value alue would more than reimburse him for the price paid for the property If It the en enterprise enterprise was successful Mr Ir Walsh made the profit and the t Jik got Its Interest on the bonds bondE If the enterprise did fail Mr Walsh lost nothing and I the bank lost the amount of the invest investment investment Investment ment When the banks closed Mr lr Walsh had taken about of their th ir funds for his personal speculation yet his name appeared nowhere on the books boo ts as debtor or borrower and the true state of or affairs was as not disco discovered discovered ered until the exhaustive examination was made by the experts who were put in control of the affairs of the banks by b the comptroller of the currency The Investigation developed the fact that there was of course no market markel for forthe forthe forthe the bonds which Walsh issued on an his struggling enterprises and that lie he made a market out of his bank where he placed the bonds at anywhere from 90 to par In this way wa Mr Ir Walsh would raise the money to pay for a property by selling Its own bonds |